Phil Willis: I expect that you, Mr. Speaker, and I were fortunate when we were growing up some 50 years ago—when we were both teenagers—in that the need for financial education was limited. The only problem that my family had with finance was managing until the next payday. Credit cards, individual savings accounts, overdrafts, student loans, annual percentage rates or even mortgages were as remote as they were irrelevant. I am glad to see that the hon. Member for Dewsbury (Mr. Malik) is in his place, as he is from Burnley, where I grew up.
	Financial education, as taught by my father, consisted of the simple philosophy of Mr. Micawber:
	"Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."
	Today's young people face a more complex financial picture. They live in a country where last year 107,000 people became insolvent, 5,300 people a day went to Citizens Advice for debt advice and our combined consumer debt reached £1.3 trillion—more than our GDP.
	It appears that as we have become more affluent we have abandoned not only the philosophy of Mr. Micawber, but our senses when it comes to finance. Right hon. and hon. Members will have dozens of examples of constituents who are in dire financial situations, often through an inability to budget or to understand financial products, and a failure to comprehend financial terminology. That is hardly surprising. An Institute of Financial Services School of Finance survey in 2004 revealed that 79 per cent. of people did not know what APR meant, 30 per cent. did not know what a standing order was,20 per cent. could not understand the concept of inflation, and 50 per cent. did not know what 50 per cent. was.
	Inevitably, that lack of financial knowledge is especially prevalent in the young. A Finance Society survey in January 2007 found that most youngsters thought that an ISA—an individual savings account—was an iPod accessory, and that winning the lottery was the best way to fund retirement.
	I am sure that no one in the House would dispute that people need to be better educated financially, or that that education should start in our schools and colleges.

Phil Willis: I certainly do agree. I will come on to that point in just a second.
	Of course, in looking at all the Government's financial education policies in the round, I am concerned that there is little if any evaluation of financial education programmes in our schools. Unfortunately, time will not permit me to elaborate, but I wish to alert the Minister to concerns raised in the Government's own report "Financial education: a review of existing provision in the UK" published by the Department for Work and Pensions in 2005. The report stated:
	"Our review found that little formal measurement of the quality of financial education teaching"—
	a point that the hon. Gentleman made—
	"is taking place through Ofsted or any other inspection mechanism. Formal measurement is likely to reduce further with the new Ofsted inspection regime starting in September 2005."
	That is quite a damning comment.
	Sprinkling personal finance across the curriculum has done little to improve financial capability and there is little evidence to suggest otherwise, so it is time for a different approach. Academic evidence from Tennyson and Nguyen published in 2001 and from the university of Manchester in 2006 suggested that a specifically designated course in which students know that its total aims relate to areas of financial management is more effective than courses that cover a wide range of areas.
	The Manchester university report provides powerful evidence of the effect that financial education can have on behaviour and young people's lives. It found that the majority of young people taking a stand-alone financial educational qualification had made positive changes in the way in which they managed their money. Many changed to a different bank account; many looked for additional, non-traditional products such as mini cash ISAs and were fully equipped to handle their money when they went off to college or university. Ninety-five per cent. of students said that they were better able to manage their finances as a result of taking a dedicated stand-alone personal course.
	A further benefit of stand-alone qualifications is that we know whether any learning has taken place and thus whether changes in financial behaviour have occurred as a result. I cannot emphasise enough to the Minister that it is essential that any actions to improve financial capability are measurable. The simplest, most cost-effective way of doing so, which is most informative in terms of the data produced, is to offer a course that requires accreditation. I accept that schools will say that it is yet more to fit into a crowded curriculum, yet more than 100 schools are already doing the equivalent of a GCSE course sponsored by ifs School of Finance. If they can do it, we need to be able to do it in the schools where students will benefit the most.
	Almost every aspect of modern life in the UK involves some form of financial transaction, irrespective of our income, class, background or academic ability. Finance impinges on everything we do so it should be taught as a stand-alone component of the curriculum. I acknowledge that there are some excellent initiatives in financial education that deserve the highest praise. I fully accept that some schools are working within the Government's overall programme and delivering high quality. Initiatives such as the learning money matters programme funded by the Financial Services Authority, in which Personal Finance Education Group employees offer teachers support via e-mail, telephone and personal visits, are super.
	I welcome those small steps, but it is really the role of the DFES to equip teachers with the skills and confidence to teach the subject by introducing a personal finance element in teacher training programmes. At present, there is no such element in any of those programmes. Maintaining the current approach and pursuing the path set by the Government for the next 10 years will not deliver the objective we seek—a financially literate society. I hope, however, that the Minister will at least reconsider functional maths in relation to personal finance. I hope that he will carefully consider the Select Committee report on citizenship in relation to financial education and that he will examine the possibility of incorporating an element of financial education in all teacher training programmes.
	Finally, I make a simple plea to the Minister. Will he look again at the evidence that supports making financial education a compulsory part of the national curriculum? Will he talk to the FSA, the Institute of Financial Services, the Institute of Chartered Accountants, the Finance and Leasing Association and the Council of Mortgage Lenders? Look at the evidence, Minister, and make new plans.